Solidarity: White disabled face raw deal
South Africa's black economic empowerment process is “racial” and has nothing to do with preventing discrimination, says trade union Solidarity
|||South Africa's black economic empowerment process is “racial” and has nothing to do with preventing discrimination, the trade union Solidarity said on Tuesday.
Deputy general secretary Dirk Hermann said that proposed changes to the Broad-based Black Economic Empowerment Act (BBBEE Act) would lead the exclusion of disabled whites from any form of empowerment.
“The exclusion of white people from empowerment is turning South Africa's empowerment process into a purely racial process instead of a bona fide anti-discrimination process.”
The anticipated amendment to the BBBEE Act comes after a regulation of the Preferential Procurement Policy Framework Act was adopted in December 2011.
Hermann said: “The state effectively kicked white people with disabilities out of empowerment legislation in December last year.”
The deadline for commenting on the proposed amendments to the BBBEE Act was Tuesday (today).
“Solidarity... lobbied for the inclusion of this group in all definitions in legislation regulating empowerment,” said Hermann.
He said white people with disabilities were currently included in the definition of the designated group in the Employment Equity Act which regulated affirmative action, but had already been removed from the BBBEE Act's definition of the disabled people group.
The proposed amnedments would result in employers earning no BEE points for employing disabled whites but would get BEE points for employing a well-off black person who was not disabled, Hermann said. - Sapa
JSE finishes weaker
The JSE ended weaker on Tuesday for the second straight session, with the resources index leading the downside due to some profit taking.
|||The JSE ended weaker on Tuesday for the second straight session, with the resources index leading the downside due to some profit taking.
Banking and financial indexes finished up amid some bargain hunting. “Nedbank came out with a fairly strong trading update on Monday, which gave rise to expectations that other banks would come with more or less similar updates,” said Ian Cruickshanks, market watcher at Nedbank Capital.
At 17:00, the JSE all-share index ended 0.59% lower to 33,974.45 points, led by gold miners down 1.99%, resources were off 1.28% and platinums shed 0.21%.
Banking stocks however lifted 0.47%, financials edged up 0.17% and industrials were down 0.37%.
The rand was trading at 7.56 to the dollar from 7.58 at the JSE's close on Monday. Gold exchanged hands at US$1,723.82 a troy ounce from US$1,720.61/oz at the JSE's previous close, while platinum was quoted at US$1,621.02/oz, from US$1,615.58/oz before.
“The JSE is still around 7% higher on the all-share index in the year to date. Investors are taking profits while looking to Greece to settle its sovereign debt problems,” said Cruickshanks.
US stocks fell after the market opened on Tuesday as worries mounted over the potential impact of Greece's failure to agree on necessary austerity measures, Dow Jones Newswires reports.
European markets also lost ground, as the inability of the leaders of Greece's political party to agree on austerity measures unnerved investors. A new fiscal pact is necessary for Greece to receive the next round of bailout funds.
Fitch Ratings said if bailout negotiations in Greece failed, severe contagion was likely across Europe.
Asian bourses were mostly lower, led by a 1.7% drop in China's Shanghai Composite. Japan's Nikkei Stock Average eased 0.1% . - I-Net Bridge
Implats strike continues
Impala Platinum's Rustenburg operation could be out of action for another week as an illegal strike continued.
|||Impala Platinum's Rustenburg operation could be out of action for another week as an illegal strike continued on Tuesday, CEO David Brown said.
“I can only give you a rough indication because of the fluidity of situation, but it will probably take another week in terms of the rehire process, then more time thereafter,” Brown said via a conference call.
He said platinum producer Lonmin had a similar situation last year when it fired 9000 workers. It took a number of months for that situation to return to normal.
Implats Rustenburg was losing 3000 platinum ounces a day, which amounted to R65 million in lost revenue a day at current platinum prices. The strike had been going on for two weeks.
Last week, Implats fired 13,000 miners who went on an illegal strike on January 30. On January 27, 4200 workers were fired for embarking on an illegal strike.
Brown said there appeared to have been incidents of intimidation and possibly two fatalities related to the strike, although he had not been able to confirm the deaths.
“A number of arrests were made when meetings turned violent today,” he said, referring to public meetings held by ex-employees.
The SA Police Service and private security were keeping control.
Ex-employees were evicted from the mine's hostel on Tuesday after an eviction order was granted by the Randburg Magistrate's Court, Brown said.
“This was carried out by the SA Police Service and sheriff of the court. We are not responsible.”
Implats had said it would rehire workers who reapplied for their positions, on the same terms and conditions as their previous employment contracts.
However, Brown said this was not going well because of intimidation.
“We are looking at starting the rehire process this week.”
Implats was also trying to get the National Union of Mineworkers (NUM) involved.
“We are engaging with the NUM to see if there is any hope of them being able to communicate with the workforce... We suspect this won't transpire and 1/8won't 3/8 result in a successful outcome.”
Implats said the problems at the mine started on January 12 when rock drill operators downed tools over salary concerns and refused to involve the recognised union, the NUM, in addressing their issues.
“Our ability to negotiate with this group of employees is being... impacted by their refusal to deal with the NUM,” Brown said.
“A new union, the Association of Mining and Construction Union (Amcu), are exploiting employee dissatisfaction in this regard.”
Brown said Implats had not received any formal demand from workers through any channel.
However, it would deal only with the legal and recognised negotiating body, the NUM.
“This particular situation is not a positive situation for both the company and the workforce,” Brown said.
“It effectively started from dissatisfaction with the NUM in terms of handling workers' requests... the rival union has used the opportunity to infiltrate the workforce.”
Brown urged the workers to return to work as soon as possible. - Sapa
‘UK pensions face 85bn pound deficit’
British companies with defined benefit pension schemes are likely to face rising pressure to plug deficits that could grow by 85 billion pounds ($134 billion) this year against a backdrop of falling bond yields and prolonged market volatility.
|||British companies with defined benefit pension schemes are likely to face rising pressure to plug deficits that could grow by 85 billion pounds ($134 billion) this year against a backdrop of falling bond yields and prolonged market volatility, a survey on Tuesday showed.
If equity markets drop 10 percent more, UK gilt yields fall another 30 basis points and inflation stays just below 5 percent, UK defined benefit pension funds could see deficits spiral, pension liability insurer Pension Insurance Corporation (PIC) estimates in its latest Pension Risk Tracker Index.
Benefits under these schemes are pre-determined using a formula based on salary and duration of employment.
“The possible impact on funding positions of QE (quantitative easing), tension in the Middle East and a Greek default might be expected to be significant. Combined, they could prove devastating,” said David Collinson, Co-Head of Business Origination at PIC.
The Bank of England looks set to plough on with a third round of quantitative easing this week to shore up Britain's economy. This will further depress the yield of UK gilts, a pension fund's staple investment, making it more expensive for funds to match income to liabilities unless they add riskier, higher-yielding assets to portfolios.
Pension funds in the UK slashed their weightings for equities to an average of 55 percent in 2011 from 65 percent, while fixed-income holdings rose to 45 percent from 35 percent calculates PIC, as the euro zone crisis roiled equity markets.
The scale of the shortfall will likely be crystallised when around 40 percent of pension funds in the UK report their triennial valuations at the end of March, an assessment of their financial strength conducted every three years.
“There will unfortunately be many tough conversations about funding plans, following March's triennial valuations,” said Collinson.
“Big companies sitting on cash will be asked by pension funds to be paid and there will be a tension there for well-off companies about how quickly they should be expected to pay off deficits.”
Large pension contributions by companies are an immediate hit on cash flow, diverting money from shareholder dividends, stock buybacks and capital investments.
UK companies would have needed to inject 470 billion pounds into pension schemes as of March 31 2011, to match their liabilities, the latest edition of the Purple Book, an annual publication of the Pension Protection Fund (PPF) and the Pensions Regulator estimates.
Set up in 2005 to protect the savings accrued by private sector workers, the PPF takes on the assets and liabilities of pension funds that fall under its jurisdiction and charges a levy to pension funds potentially eligible for its help.
PIC has around 4.5 billion pounds in assets and has insured more than 50,000 pension fund members from FTSE 100 companies, multinationals and the public sector. - Reuters
Swiss banker a euro crisis Nostradamus?
Nearly two decades ago, the man now likely to become the head of Switzerland's central bank foresaw the neighbouring euro zone's troubles in a doctoral thesis, saying the likes of Ireland, Italy and Greece would not be able to control their debt.
|||Nearly two decades ago, the man now likely to become the head of Switzerland's central bank foresaw the neighbouring euro zone's troubles in a doctoral thesis, saying the likes of Ireland, Italy and Greece would not be able to control their debt.
Vice Chairman Thomas Jordan, who has served on the Swiss National Bank's governing board since 2007 and is currently interim chairman, also said a currency union gave some states the incentive to load up on debt and could lead to a banking crisis.
Jordan was thrust into the limelight last month when SNB chairman Phillip Hildebrand stepped down amid an uproar over a currency trade made by his wife.
In his dissertation for the University of Berne, published in 1994, roughly eight years before Europeans handled their first euro notes and coins, Jordan prophetically warned of strained public finances in exactly those countries that have actually needed a bailout or where debt levels seem particularly precarious.
“Achieving the 60 percent debt limit is hardly possible for Belgium, Ireland, Italy and Greece,” he wrote. “Italy and Greece need to undertake major steps even to stabilise their debts.”
Jordan is far from the only economist to express reservations about Europe's common currency, especially because the bloc lacked a fiscal union.
But his views are significant because he is likely to become SNB chairman, in charge of defending a cap of 1.20 per euro on the Swiss franc.
The cap was introduced in September to stop the currency soaring as investors sought a safe haven from the euro zone crisis.
Ernst Baltensperger, who supervised Jordan's thesis, said the fact it reads like a story of what actually transpired demonstrated his capacity to combine sharp analysis and policy judgement.
“A careful reading of his thesis further shows his great intellectual independence and tenacity in pursuing and developing complex arguments,” Baltensperger said.
PRESCIENT VIEW
When countries with varying levels of debt form a currency union, interest rates for those with relatively low borrowings rise while they fall for those with high debts, Jordan wrote.
This raised the incentive for countries with high debts to borrow more within a bloc than they would alone. Yet because of the currency union, governments also lost the ability to monetise debts via inflation or debasement.
Exactly this has happened, leading to huge debt problems in Greece, Portugal, Spain, Italy and Ireland and stress elsewhere.
“The inability of a state to pay its debts could lead to a banking and financial crisis if these institutions hold large portions of national debt,” Jordan wrote, forecasting investors' current anxiety about the large sums of Greek debt held by banks and insurers across Europe.
Among the most controversial episodes of the now two-year-old debt crisis is the European Central Bank's controversial decision to buy the bonds of troubled sovereigns.
Jordan explained in his thesis that if the financial system were to seize up due to a government's inability to fund itself, the central bank would have to act as a lender of last resort and effectively bail out the insolvent state.
“When a member state faces severe problems, the union, which is fundamentally a community of solidarity, cannot avoid giving financial assistance,” he said. - Reuters
DA: 2011 not year of the job
Figures showing that there are now 4.244 million unemployed South Africans indicate that President Jacob Zuma's jobs promise has failed.
|||Figures showing that there are now 4.244 million unemployed South Africans indicate that President Jacob Zuma's jobs promise has failed, the Democratic Alliance said on Tuesday.
“The quarterly labour force survey for the fourth quarter of 2011 (released on Tuesday) indicates clearly that President Zuma failed to deliver on his promise to make 2011 the 'year of the job',” DA MP Sejamothopo Motau said in a statement.
“More South Africans are unemployed now than when President Zuma first promised to make 2011 the year of the job in his State of the Nation address in February last year.”
The number of unemployed South Africans had increased from 4.137m to 4.244m in 2011, he said.
“Another troubling statistic is that a further 165,000 South Africans have been unemployed for so long that they have given up on looking for work,” Motau said.
“This means that the number of people that are too discouraged to look for work has increased from 2.15m people to 2.315m people in 2011.”
Motau said there was some good news, with 365,000 jobs created in 2011.
“It is good that 365,000 South Africans have been given an opportunity to improve their lives, but unfortunately not enough jobs were created to compensate for the hundreds of thousands of young people who entered the workforce for the first time this year.
“It is clear that job growth is not fast enough to absorb all the members of our growing workforce.”
Motau said it was clear that the government needed new economic policies to generate growth and job creation. - Sapa
Cosatu to strike over brokers, tolls
A national strike will be held on March 7 to protest against labour brokers and the proposed Gauteng toll roads.
|||A national strike will be held on March 7 to protest against labour brokers and the proposed Gauteng toll roads, Cosatu said on Tuesday.
The action would be legal and no trade union worker could be punished for downing tools, Congress of SA Trade Unions general secretary Zwelinzima Vavi told shop stewards in Soweto.
“We must mobilise our members in every industry. Our strength is unity and it through unity that we can achieve our goals.”
Cosatu's Gauteng secretary Dumisani Dakile said he wanted to see teachers leading protest marches on March 7.
“SA Democratic Teachers' Union (Sadtu), we are looking to you to make sure this happens,” Dakile said.
This meant schools would close on the day of the strike.
Vavi called for the outlawing of labour brokers and said they undermined trade unionism by enabling employers to run their businesses using casual workers.
Brokers handled every aspect of the employment process, keeping the real employer at arm's length from its human resources. They also provided temporary workers to industries.
Vavi said the proposed Gauteng tolls were also not up for discussion.
“The government is telling us not to cut off dialogue, but we cannot move from our position. We do not want tolls,” he said.
“We want the right to use public roads without having to pay for it.”
“What's next?” he asked. “Will it be tolls for Cape Town and Durban?”
“The government should be focusing on ensuring safe, affordable and reliable public transport, so that ordinary people can get home after work without being mugged and raped.”
Vavi was clear on the points where Cosatu disagreed with South Africa's leadership, but said the ANC and Cosatu were inextricably intertwined.
The failure of one would mean the inevitable end of the other.
“As workers we have to ensure that the ANC does well and rediscovers its revolutionary morality.”
However, it had to “fix its house before it landed on its head,” he said.
To do this, decent jobs, quality education, food security, health care, and crime had to be addressed as a priority.
Vavi appealed to workers not to fixate on leadership succession within the ruling party.
“We cannot have a situation where the national debate is dominated by leadership succession to the detriment of real issues.”
At the beginning of his hour-long speech, Vavi said the Eastern Cape government and Sadtu were on the verge of ending their differences and that an agreement would be announced on Wednesday.
“I am on my way to the Eastern Cape after this meeting and I believe that by tonight we will have the breakthrough,” he said. - Sapa
SA signs pact with Mozambique, Tanzania
South Africa signed a maritime agreement with Tanzania and Mozambique to join forces against pirate attacks along the east coast of Africa.
|||South Africa signed a maritime agreement with Tanzania and Mozambique on Tuesday to join forces against pirate attacks along the east coast of Africa.
The trilateral agreement followed a surge in attacks by Somali pirates.
“The agreement will see the three countries working together in securing territorial waters of each respective country,” the department of defence said.
“This includes the three parties sending members to participate in the combined maritime operations aimed at searching and interdicting bases of pirates and any other illegal activities in the territorial waters.”
At the signing ceremony in Dar es Salaam, Tanzanian President Jokaya Kikwete thanked President Jacob Zuma and his Mozambican counterpart Armando Guebuza for working together to fight piracy in the southern part of the Indian Ocean.
“We will do everything possible to support our forces in combating piracy effectively... we have to keep our seas safe,” Kikwete said in comments quoted by the department of international relations.
Sisulu said the three countries had “taken a lead in implementing the maritime strategy endorsed by Southern African Developing Community”.
The agreement gave rights to the three forces to, among other things, patrol, search, arrest, seize and undertake pursuit operations on any maritime crime suspect or pirate.
The South African frigate, SAS Mendi, is deployed along the Mozambican channel to combat piracy.
The signing ceremony was attended by navy chief Vice Admiral Johannes Mudimu and the Tanzanian and Mozambican military commands. - Sapa
Greek rescue inches closer
For two years, European officials have wrestled with Greece to try to save the country from financial ruin.
|||For two years, European officials have wrestled with Greece to try to save the country from financial ruin. Yet the closer talks get to a definitive deal, the greater the risk seems to get that negotiations might collapse once and for all.
Deadlines have come and gone, as have rescue packages, but now there is a firm one. Greece will be unable to meet massive bond payments on March 20 without more aid.
A first, 110-billion-euro plan was put together in May 2010, only to prove insufficient as Greece's situation worsened. A second, 130-billion-euro deal was agreed last October, but is yet to be finalised despite drawn-out, high-pressure negotiations that have left nerves and tempers frayed.
So many moving parts now need to come together at a single moment to clinch the deal that the danger of one piece being out of place and scuppering the whole enterprise has never been greater.
“They are dancing on a razor's edge,” said Janis Emmanouilidis, a senior analyst at the European Policy Centre in Brussels who has written extensively on the debt crisis.
“Time is now really, really short. The further the crisis develops, the more intense these moments become. If something goes wrong, and that's becoming increasingly possible, at some point it could all not work out, with whatever consequences.”
Emmanouilidis, a German-speaking Greek who in that respect straddles the poles of Europe's debt debacle, thinks it will work out in the near-term, with Greece's political leaders reaching a last-minute accord with the EU and IMF.
The lenders have demanded all parties sign up to the austerity measures demanded as part of the second bailout but with elections approaching in April, that could be akin to writing a political suicide note.
Even if they do sign up, there are several other elements that could go wrong in a multifaceted conundrum that has been likened to playing three-dimensional chess but which sometimes now borders on quantum physics for its complexity.
“The trend is that the situation is becoming more and more dangerous as the variables increase. The puzzle is becoming more complicated and the danger is bigger than ever before. But I still think things will fall into place,” Emmanouilidis said.
DELICATE MACHINERY
For that to happen, at least six things have to come together between now and an EU leaders' summit on March 1 - the next putative deadline, although that could also be pushed back.
First, Greece's political parties need to agree that they are committed to a deal, which is no simple task given elections are due in April and every party leader is bidding for power.
Next the Greek government needs to submit a written commitment on the agreement to the European Commission, the European Central Bank and the International Monetary Fund, the 'troika' of overseers monitoring Greece's economic progress.
Then a deal that Athens has struck with private holders of Greek debt, which would see those creditors exchange around 200 billion euros of bonds for longer-dated securities with a lower coupon and half as much nominal value, has to hold - a sensitive process called a bond exchange that can take weeks.
At the same time, the troika must agree that the relief delivered by the bond exchange is sufficient to cut Greece's debts to 120 percent of GDP by 2020, from about 160 percent now - a stipulation the IMF is particularly firm on.
If that is not the case, then there may have to be a further negotiation over the official sector - the ECB and national euro zone central banks - possibly taking a writedown on some of their Greek bond holdings to bring the debt burden down further.
Euro zone finance ministers must sign off on all of that and launch the process of raising the funds Greece needs via the European Financial Stability Facility, their bailout fund.
And all of that must happen without parliamentary committees in Germany and Finland - which have to grant approval for their governments to commit - raising last-minute objections.
In all of those steps, analysts and officials see the greatest risk at the start of the process, with Greece's political parties, which were again in negotiations on Tuesday but have so far shown little inclination to bite the bullet.
“The last mile has to be covered by the Greek political parties, the last mile to reach the second programme and to ensure a sustainable plan,” said Amadeu Altafaj, the European Commission's spokesman on economic and monetary affairs.
“We still hope for an agreement this afternoon at the meeting that Mr. Papademos will hold with the party leaders,” he said, referring to the prime minister's last-ditch bid. “But we are running out of time.”
For Christoph Weil, a euro zone economist at Commerzbank, it is also Greece's politicians who have the ability to cut the Gordian knot, or else scuttle the EU's efforts, depending on how they respond to the troika's demands.
“My base scenario is that there will be an agreement and we will see a second rescue package, so the problem will be under control for the moment,” he said on Tuesday.
“But in the longer run I am pessimistic, I think it is only a question of time before the Greeks leave the euro. Because they are unable to reform, the government is unable to reform its institutions at all.”
Those feelings are reflected by others. It may be that Greek party leaders and the government deliver at the very last second and a debt default - failure to meet a 14.5 billion euro bond redemption on March 20 - is averted.
That, combined with the expectation that EU leaders will agree in March to increase the ceiling on their rescue fund to 750 billion euros, and that the ECB will deliver another shot in the arm to debt markets with more cheap three-year loans on February 29, could shift the debt crisis onto a positive footing.
But still Greece's problems will linger. Already analysts expect Athens won't meet its commitments even if it signs up to them. That failure could be exposed at the first review, in theory due three months after the next programme is agreed.
“The lack of confidence in Greece's ruling class has never been so high,” said Emmanouilidis. “There's this feeling that they can't deliver and also this sense that if they can't deliver, then the euro zone will have to do without them.
“My feeling is that it will work out now, but if you look further ahead, beyond March... I don't know.” - Reuters
Bernanke to stick with low-rate stance
Federal Reserve Chairman Ben Bernanke has called the US economy “frustratingly slow”.
|||Federal Reserve Chairman Ben Bernanke has called the US economy “frustratingly slow.” On Tuesday, Congress will find out whether he still thinks so, even after Friday's news that hiring surged in January and unemployment reached a three-year low.
Don't expect a radical new outlook on the economy.
When Bernanke testifies to the Senate Budget Committee, economists expect no shifts in the Fed's efforts to bolster the recovery. They say Bernanke's tone might be slightly more upbeat than when he spoke Thursday to House members. But they expect him to reiterate the Fed's plan to keep a key interest rate at a record low near zero until at least late 2014.
The super-low rates are meant to encourage consumers and businesses to borrow and spend and further strengthen the economy.
Analysts also expect Bernanke to hold out the possibility that the Fed might launch another round of bond purchases later this year if the economy needs more support. Such purchases are intended to further drive down long-term rates.
But many private economists think the timetable for any new bond purchases has been pushed back because of last week's robust jobs report. And if the economy keeps improving, they say that the notion of more bond purchases could be permanently shelved.
On Friday, the government said employers added 243,000 jobs in January, far more than expected. And unemployment fell for a fifth straight month, to 8.3 percent. Still, 8.3 percent is still painfully high. Nearly 13 million people remain unemployed.
“I expect that Bernanke will take note of the good news that the economy is healing while saying that the bad news is that it is healing slowly,” said Nariman Behravesh, chief economist at IHS Global Insight.
Bernanke will likely keep all the Fed's option open, in part because of threats to the US economy from abroad. They include Europe's debt crisis and rising tensions with Iran that could disrupt global oil supplies.
Moreover, Congress is still debating whether to extend a Social Security tax cut that benefits 160 million Americans and is due to expire at the end of this month.
“The uncertainty level right now is just so high,” said Diane Swonk, chief economist at Mesirow Financial. “The Fed is going to be very cautious in changing its stance.”
At its last meeting Jan. 24-25, the Fed for the first time published forecasts of where officials think the Fed's key rate, the federal funds rate, is headed over the next three years and when they expect the first increase.
The rate has been near zero since December 2008. In its policy statement in January, the Fed said it would probably not increase that rate until late 2014 at the earliest - a year and a half later than it had previously said.
At the House hearing last week, Bernanke defended that decision against Republican criticism that it raises the threat of high inflation and of speculative bubbles in assets. Earlier extended periods of low rates triggered a bubble in technology stocks in the late 1990s. When that bubble burst, it contributed to the 2001
recession.
A separate period of low rates has been blamed for fueling the housing bubble, which burst and helped lead to the Great Recession. But on Thursday, Bernanke noted that inflation has declined, while unemployment and slow economic growth remain problems.
Economists say Fed officials are prepared to keep rates low as long as inflation is tame. But if prices were to escalate, analysts say it would cause the Fed to move up its late-2014 timetable for a rate increase, even if growth remained slow.
The decision to announce that the Fed doesn't plan to raise its benchmark rate until late 2014 at the earliest was adopted on a 9-1 vote. The lone dissenter was Jeffrey Lacker of the Federal Reserve Bank of Richmond. Lacker said he doesn't think the economy needs low rates for that long and fears they could trigger high inflation.
Some other Fed regional bank presidents are also skeptical. On Monday, St. Louis Federal Reserve Bank President James Bullard said: “A near-zero rate policy stretching over many years can begin to distort fundamental decision-making in the economy in ways that may be destructive to longer-run economic growth,” Bullard said.
Still, Joel Naroff of Naroff Economic Advisors, said while some Fed officials have misgivings, Bernanke commands a solid majority of the Fed's policy group. He said the Fed will probably stick with the late-2014 timetable for now, in part to avoid sending mixed signals to the financial markets.
“I don't think they will move off that target this year unless the economy really takes off,” Naroff said. - Sapa-AP